All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

The use of management expertise was established solely in the SA by the law of 1966 . The law of 1 March 1984  expanded the possibilities for recourse to expertise, which had previously been reserved only for minorities, before the NRE law of 15 May 2001  added a new category of applicants, namely shareholder associations, and modified the rules for accessing the procedure.

Henceforth, Article L. 225-231 of the Commercial Code provides that an association composed of shareholders who have been registered by name for at least two years and collectively hold at least 5% of the voting rights, as well as one or more shareholders representing at least 5% of the share capital, either individually or by grouping together in any form, may submit written questions to the chairman of the board of directors or the executive board regarding one or more management operations of the company, as well as, if applicable, the companies it controls within the meaning of Article L. 233-3. In the latter case, the request must be assessed in light of the group's interest. The response must be communicated to the statutory auditors, if any. Only the public limited company whose management is targeted has the standing to defend against a request for management expertise: its holding company must be dismissed if it has also been involved . The ability to request expertise on the operations of companies within the same group did not exist before the NRE law . Furthermore, since this law, the written question constitutes an indispensable prerequisite for any request for expertise. It is only in the absence of a response within a month or the lack of satisfactory response elements that shareholders may request in summary proceedings the appointment of one or more experts to present a report on one or more management operations . A shareholder who, in letters addressed beforehand to the chairman of the board of directors, has only generally questioned the company's management policy without specifically requesting explanations related to clearly identified management acts, cannot request management expertise .

Minority shareholders of a public limited company have an interest in taking legal action and are admissible in their request for the appointment of a management expert, even if liability actions against directors or nullity of corporate resolutions that could be an extension thereof are time-barred . Similarly, a management expertise can be requested by shareholders who participated in the deliberations concerning the contested operations and therefore are aware of their existence . The right to take legal action to request a management expertise is assessed at the date of the initiating application and cannot be challenged by subsequent circumstances, such as the subsequent loss of shareholder status or the responses provided by the statutory auditor to questions raised about management .

The law also provides that the public prosecutor and the Social and Economic Committee may request in summary proceedings the appointment of one or more experts tasked with presenting a report on one or more management operations. However, the judge may reject the request for a new management expertise made by the company's Social and Economic Committee if it is deemed that it would not provide any additional information beyond what has already been noted by the accountant in two reports .

The judge must, in order to grant the measure, ensure that it is indeed to verify the regularity of a management operation and examine the seriousness of the request. The request must indeed be based on presumptions of irregularities affecting one or more specific management operations and not on grievances lacking seriousness . The mere fact that activities generate losses is not sufficient to imply irregularities justifying the ordering of a management audit . However, the admissibility of the request is not contingent upon proof that the corporate bodies have disregarded the company's interest and diverted their powers from their purpose, as it precisely aims to establish this proof, but on demonstrating the seriousness of this request, which may result from the existence of abnormal financial relations between a parent company and its subsidiary .

The request must concern a management operation, which falls under the powers of the management and not the shareholders' meeting . This is not the case for the valuation of an asset for the purpose of determining the amount of a contribution to the company  or the assessment of the reliability of a subsidiary's accounts and its consequences on those of the parent company, as long as the expertise cannot challenge the regularity and sincerity of the financial statements . Furthermore, management expertise cannot concern the entire management of the company: it must be limited to specific and enumerated operations .

Management expertise often serves as a prerequisite for more advanced measures. Indeed, the existence of anomalies resulting from the presentation of a false balance sheet, revealed by informative management expertise, can trigger a request for in futurum expertise of a probative nature for a subsequent legal action . However, an investigative measure requested under Article 145 of the Code of Civil Procedure is not subsidiary to the management expertise provided for by Article L. 225-231 of the Commercial Code, so shareholders can resort to the former, notwithstanding their rights to information and voting in the company . Conversely, the mechanism provided by Article 145 cannot be used when minority shareholders seek not to preserve or establish proof of facts on which the resolution of a dispute may depend, but to understand the classification of regulated agreements and agreements on routine operations concluded by the company and, therefore, to obtain information on management operations .

L. 66-537 of 24 July 1966 on commercial companies.

L. 84-148 of 1 March 1984 on the prevention and amicable settlement of undertakings' difficulties.

Cass. com., 12 February 2008, LawLex202200005612JBJ.

Cass. com., 22 March 1988, LawLex202200005604JBJ, emphasizing that the request was part of a harassment process by a former executive against the current executives with the aim of imposing his own policy.

See not. Montpellier, 1 July 2008, LawLex202300009997JBJ.

Cass. com., 15 July 1987, LawLex202200005611JBJ.

Cass. com., 14 December 1993, LawLex202200005610JBJ.

Cass. com., 14 December 1993, LawLex202200005610JBJ; 15 July 1987, LawLex202200005611JBJ.

Cass. com., 24 June 2020, LawLex202200005607JBJ.

Cass. com., 18 October 2011, LawLex202200005606JBJ.

Law No 2001-420 of 15 May 2001 on new economic regulations.

Cass. com., 11 September 2024, LawLex202400006112JBJ.

Cass. com., 21 March 2018, LawLex202200005609JBJ.

See, before this law, Cass. com., 14 December 1993, LawLex202200005610JBJ, rejecting a request for management expertise made by the shareholder of the parent company since it concerned a management operation carried out by a subsidiary.

See, for an application, Cass. com., 14 February 2006, LawLex202200005602JBJ.

Cass. com., 6 December 2005, LawLex202200005608JBJ, and, on remand CA Montpellier, 1 July 2008, LawLex202300009997JBJ.

512. Mission